Posts Tagged ‘india car sales’

Despite signs of a slowdown in the once-booming market, Ford this week laid the cornerstone of what will be a new $1 billion assembly plant in India.

It’s a critical part of the U.S. makers plans to become a major player in emerging markets – where it has lagged behind key competitors such as Volkswagen and General Motors. Among other things, Ford plans to launch new products in India by the middle of the decade to appeal to the country’s fast-growing and increasingly mobile middle-class.

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“We are committed to significantly increasing our manufacturing output and aggressively expanding our business in India,” Michael Boneham, Ford India’s managing director, said in a statement.

The question is whether Ford’s investment is ill-timed. India – one of the so-called BRIC markets, along with Brazil, Russia and China – has shown unexpected weakness in new car demand lately, some analysts fretting that the bloom is off the automotive rose after steady, double-digit growth.

The Ford Figo will be joined by at least eight new models as the maker presses into India.

Ford will invest nearly $1 billion in India in a bid to gain ground in what many see as a market that could potentially rival the long-term growth of China.

Most of that money – about $900 million – will go for a new plant, the company’s second, that could boost Ford’s Indian production capacity from the current 240,000 vehicles a year to 600,000. The announcement comes as Ford begins expanding its product portfolio with the Indian launch of the Fiesta, its global subcompact.

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“We don’t see the fundamentals changing here in India and the rest of Asia, and that is that growth is going to be the order of the day,” said Michael Boneham, head of Ford’s Indian operations.

Earlier this year, Ford CEO Alan Mulally outlined an aggressive growth plan that calls for boosting worldwide sales to 8 million this decade, a 50% jump. The executive stressed the importance of the Asia/Pacific region in meeting that goal.

Toyota is one of many foreign makers hoping to gain ground as the Indian automotive market expands.

India is expected to grow into one of the auto industry’s superpowers during the next decade, according to a new report by J.D. Power & Associates – and is likely to become the world’s third-largest automotive market by 2020.

The new study, “India Automotive 2020: The Next Giant from Asia,” noted that the vast subcontinental market already surpassed France, the United Kingdom and Italy to become the sixth-largest automotive market in the world in 2010. More than 2.7 million light vehicles were sold in India in 2010, up from just 700,000 a decade earlier.

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By 2020, the report projected, India’s automotive volume will grow to 11 million, positioning the nation of 1.2 billion just behind China, with projected annual sales of 35 million units in 2020, and the U.S., where light vehicles sales are pegged to reach 17.4 million.

“India has quickly become one of the largest and fastest-growing automotive markets in the world,” said John Humphrey, senior vice president of global automotive operations at J.D. Power and Associates.